Snapchat adds users, but shares slump
July 22, 2022
Snap, owner of Snapchat, has announced that daily active users of its social media sharing app increased by 18 per cent year-on-year in its Q2 to 347 million. However, revenue increased 13 per cent year-over-year to $1.11 billion (€1.09bn), missing expectations. Net loss was $422 million, compared to $152 million in the prior year.
Snap shares slumped by more than 25 per cent in after-hours trade in New York. The company’s stock has now lost almost two-thirds of its value in 2022
Snap warned that, going forward, it faces “incredibly challenging” conditions. The company said some of its advertisers had cut spending as they faced rising costs, supply chain disruptions and labour shortages. Snap also pointed to privacy changes to iPhones and increased competition from the likes of TikTok for missed its financial guidance.
The firm said it now aims to reduce hiring, grow its advertising business and find new sources of revenue.
“While the continued growth of our community increases the long–term opportunity for our business, our financial results for Q2 do not reflect our ambition,” said Evan Spiegel, CEO. “We are evolving our business and strategy to reaccelerate revenue growth, including innovating on our products, investing heavily in our direct response advertising business, and cultivating new sources of revenue to help diversify our topline growth.”